The methodology, in fullFive actuarial moves, one defensible number per line.
At the core are five adjustments that turn a carrier’s quoted loss ratio into a defensible one; the full sequence below runs nine. The same logic appears as a footnote on the report PDF, so when the underwriter pushes back, the answer is already on the page.
Every step, EHC / Dental
- 01
Strip large claimants from the claims
Individual claimants above the carrier’s own stated pooling threshold come out of paid claims, leaving the experience the group is actually responsible for. Nothing is added back in their place: pooling is priced once, on the premium side, when step 07 reconstitutes the charge — so the group is never billed for the same pooled risk twice. An advisor can also argue genuinely one-time spend below that threshold out of the experience — equipment for a member who has since left, a maximum now exhausted. That adjustment is the advisor’s, not the carrier’s, so the report and the challenge letter both state the amount and the reason rather than presenting a smaller claims figure as though the carrier had reported it.
- 02
Remove the pooling charge from gross premium
The carrier’s pooling charge comes out of gross premium to reveal net premium — what was actually available to cover group claims. This is the denominator the carrier doesn’t want shown. A Québec group has two pooling layers, not one, and the QIP charge comes out alongside the standard one.
- 03
Complete the claims with IBNR
Incurred-but-not-reported claims are loaded onto paid claims. For EHC and Dental the IBNR figure is never silently guessed — it comes from the carrier’s own disclosure, your booklet library, or a value you enter. Miss it and the analysis hard-blocks rather than inventing one.
- 04
Compute the real net loss ratio
Incurred claims ÷ net premium. Materially higher than the carrier-quoted loss ratio, because the denominator dropped and the numerator rose. This is the negotiating number.
- 05
Trend to the renewal midpoint
The experience period is projected forward to the policy period being priced. When the renewal discloses its own trend assumption, blankit uses it — nothing to argue about. Where month-by-month claims are available, blankit also reads them for a sustained change of level — the signature of a high claimant leaving the plan — and tells you the month, the level either side, and what those elevated months put into the period. It is shown as evidence and never repriced on: the fair premium is still built on the carrier’s own experience window, because an analysis that quietly swapped in a shorter one is the single thing an underwriter could dismiss it on.
- 06
Credibility-blend against the carrier’s book rate
The square-root rule (Limited Fluctuation Credibility) blends the trended group experience with the carrier’s manual rate. Larger groups carry more weight; smaller groups borrow more from the manual. Unless you set the credibility yourself for that analysis — your figure always wins — blankit takes the renewal’s own stated credibility when it credits the group MORE than the standard, and raises it to the standard when it credits them less — a carrier picks that weight in its own favour, low when your claims are good and high when they are not, so it is the one figure on their page that is an argument rather than a disclosure. That manual is the rate the carrier set at the last renewal, carried forward at their own trend — never the renewal they have just proposed. The ask is the thing being challenged, so it cannot also be an input to the answer, and a carrier who opens higher cannot move the number blankit puts back to them.
- 07
Gross up by the carrier’s own target loss ratio
Health and dental are grossed up by the target loss ratio you set per client from the carrier’s renewal, your booklet library, or Salesforce. Holding the carrier to their own pricing target — not a guessed benchmark — is what makes the position aggressive and defensible. The pooling charge stripped in step 02 is then reconstituted, so the fair premium compares like-for-like against the carrier’s pooling-inclusive ask.
- 08
Run the carrier’s own rate formula, and never counter above it
A renewal that prints its loss ratios, its target loss ratio, its trend and the credibility it gave the group has published a complete rate formula. blankit runs it — at the carrier’s own credibility, on the carrier’s own weighted experience, entirely on their figures and none of ours — and the fair premium is never above the number it produces. It can only ever lower a recommendation: where a group’s experience is genuinely poor, the carrier’s formula sits above blankit’s own calculation and nothing changes. Where it does not, the gap between what their formula asks for and what they actually proposed is unexplained margin, named in dollars.
- 09
Cap at the carrier proposal — and say when the ask holds up
blankit will never recommend paying more than the carrier asked for: the fair premium is the lower of the calculated value and the carrier proposal. Where the calculation landed before that cap is reported too. When it meets or exceeds the ask, the line is stated as defensible rather than challenged — a tool that finds every renewal excessive is not an analysis, and an underwriter learns to read it that way.
The nine steps above are the EHC and Dental path — the two lines a carrier rates on the group’s own claims, and so the two worth challenging on them. Life, Dependent Life, AD&D and Critical Illness are volume-rated, priced off age and headcount rather than experience; disability and EAP carry no experience to re-rate either. Those lines are not put through the nine steps — they are not argued with on math that doesn’t apply to them — but they are not conceded either: every line on the renewal is countered just below what the carrier asked for, and the report says plainly which figures are rated and which are position.
Not being experience-rated is not the same as being unexamined. Where the renewal carries the carrier’s own age-band tables, blankit splits an age-rated line’s movement in two — the part a bigger, older census already explains at last year’s rates, and the part that is the carrier repricing on top. An increase sold as “your group is aging” that turns out to sit mostly in the second half is a rate action, and the split is drawn from the carrier’s own numbers. A one-anniversary-forward projection comes with it, labelled as the estimate it is.
